For China's Wealthy Consumers, Luxury Spending Is Now 'A Way Of Life'

Swiss bank Julius Baer released its third annual “Wealth Report”
today, and its findings on China reflect several key
trends that we’ve been seeing for a while now: a growing
number of affluent Chinese consumers are viewing luxury purchases
as “lifestyle” rather than “celebratory” acquisitions, and are
becoming more sophisticated with a greater interest in niche
labels, quality, authenticity, brand
heritage, and understatement.

“Today’s affluent Chinese consumers see luxury as a way of life,
not just the occasional purchase of a good or service, separate
from the rest of their lives,” read the report.

The frequency of goods purchased among affluent individuals has
been increasing, as indicated in the chart below comparing 2011
and 2012.

The numbers for 2013 may be different for heavily gifted sectors
such as watches and spirits, which are feeling the effects of
the government’s
current luxury crackdown, so future studies will need to take
into account additional luxury goods in order to gain a fuller
picture of purchase frequency.

The report also emphasizes the fact that China’s affluent
are becoming more sophisticated in a complex variety of ways.
“They are becoming savvier about the relationship between quality
and price,” states the report. It also stresses that Chinese
clients have expressed a “growing appreciation for authentic
products,” are looking for quality and understatement “over the
importance of logo,” and are tapping into heritage.

These changes have paved the way for niche labels,
according to the study’s findings.

"When it comes to the preference for brands, established
large brands such as Chanel, Louis Vuitton, Gucci, and Christian
Dior continue to dominate,” states the report. “But consumers are
also expanding their repertoire toe contemporary brands, such as
Marc Jacobs, Shang Xia, Shiatzy Chen, Stella McCartney, and
Alexander Wang.”